US crude stockpiles fell more than analysts expected today, but gasoline stockpiles rose for the first time in eight weeks sending oil prices down.
Analysts forecast crude stocks would fall by around 2.7m barrels and gasoline would drop by 1.5m barrels, but official data from the US Energy Information Administration (EIA) for the week ending 4 August showed crude inventories fell by 6.5m barrels while gasoline stocks rose by 3.4m barrels, the most since January.
Crude prices edged lower on the news. Global benchmark Brent crude futures were nearing $53 a barrel ahead of the inventory report, but dropped back down to $52.22 per barrel in afternoon trading, still up 0.15 per cent from the previous close.
US benchmark West Texas Intermediate (WTI) prices were down 0.06 per cent at $49.14 a barrel, after nearing $50 before the report.
"Crude prices have experienced yet another day of indecision despite a sharp drawdown in US crude inventories last week," said Joshua Mahony, market analyst at IG.
"Recent months have seen a strong contraction in US crude stocks, with driving season clearly raising demand and subsequently reducing the overcapacity that has been evident in recent years. With the break-even cost of production for US shale producers speculated to be around $50, there may be some form of bottom around that level, which could explain the strength seen in recent weeks."
Traders lose confidence in Opec
Gains earlier in the day were capped by investors' doubts over compliance with production cuts led by the Organisation of the Petroleum Exporting Countries (Opec).
The cartel and non-members including Russia have agreed to cut output by 1.8m barrels per day to prop up oil prices, but compliance has slipped in recent months.